International Trade and Nigeria’s Economic Growth

The given study was conducted with the general goal of investigating international trade and its effect on economic growth in Nigeria during the time frame 1986-2023. The independent variables include Exchange rate (EXR), the Balance of payments (BOP), the Oil Sector Trade (OT) and the Non-Oil Sector Trade (NOT) respectively as the independent variables of the study and the dependent variable was Real Gross Domestic Product (RGDP). The data used to compile the study were obtained in the Central Bank of Nigeria (CBN) Statistical Bulletin (2023) and World Bank Development Indicators (2023). Using the Ordinary Least Squares as the method of its research, it was found that the effect of the Oil Sector Trade (OT) on the economic growth was positive and statistically significant, which means that the impact of the exports of crude oil continues to be the most important factor affecting the GDP of Nigeria. There was a positive but statistically insignificant effect of Non-Oil Sector Trade (NOT) on growth due to poor performance of the non-oil exports. The only significant difference that made up the Exchange Rate (EXR) a negative contributor to the economic growth represented that exchange rate volatility influenced the performance of trade and investment negatively, whilst the Balance of Payment (BOP) was a positive contributor, meaning that better external position harms growth. This is why it concluded the study found out that international trade actually has a key role to play in the development of the Nigerian economy and that oil exports have a major but fluctuating role. It is advised that the government ought to diversify the export base by not only reducing reliance on oil but also on the exchange rate by exercising credible monetary policies and enhancing the trade infrastructure to support non-oil exports as a means of attaining sustained economic growth.